Telecom has announced its financial results for the year to June 30, 2011, writing off $257 million in asset impairments associated with the upgrade to Ultra Fast Broadband.

Discounting the asset impairments, the company’s net earnings managed a modest increase, rising 1.6% from $382 million to $388 million.

Telecom CEO Paul Reynolds says the result shows strong performance in an increasingly competitive environment.

"At the start of 2011,” Reynolds says, "Telecom updated its strategy to reflect New Zealand’s challenging and competitive operating environment, create a leaner and more effective operating model, prepare for a fibre future, and ensure an intense focus on FCF [Free Cash Flow] through management of capital and operating costs.

"Customers have benefited from lower prices overall and better performing products.”

As well as the $257 million for copper-related assets, Telecom reported one-off costs of $42 million in earthquake-related costs and $29 million in UFB and demerger costs, relating to the splitting of the company from its network arm, Chorus.

Although total mobile users decreased by 95,000, mobile phone revenue grew by 5%, and mobile data revenue by 8%. 82% of mobile revenue is now generated by the XT network.

Telecom says the drop in users is mostly attributable to low-value customers on the CDMA network becoming inactive.

Go here to read the full financial results.